Deals on wheels

21:05Sean Farrington:So the fundamental opportunity is that there's a huge opportunity to improve road safety, as well as creating more sustainable and accessible transportation through autonomy.

21:14man who runs the geothermal power plant:When we look at the infrastructure of our roads, the quality of them, is the investment into those roads there for us to be able to capitalise on having a business like yours that may well be a leader in its industry globally?

21:30Sean Farrington:Absolutely. We've built the system to drive on roads without needing any infrastructure change. So we don't need special traffic lights or maps or rules.

21:38man who runs the geothermal power plant:So the pothole is not a problem?

21:41Sean Farrington:Not at all. The AI has the intelligence to drive on roads, the same ones as you and I, and just drive within the environment that we have today. So it is built to operate in the world that we live in alongside us, and it'll be another choice. Londoners and other cities we operate in, the benefits of robotaxis can be a choice for people that want to take these services.

22:02man who runs the geothermal power plant:Now, traditional car companies very much involved in this investment, as I mentioned before, would you have an issue doing deals with the newer wave of Chinese car companies, letting them use your technology?

22:11Sean Farrington:It's a good question. We're focused initially on major Western automakers throughout Europe, Japan, North America. And we're working today with these automakers to bring products to market. Why are you focused on those and not, you know, many of our listeners now will be much more

22:25man who runs the geothermal power plant:familiar with Chinese car company brands than they were before?

22:28Sean Farrington:I won't get into geopolitics, but we operate within a world where we're able to work really quickly. And actually from the UK, we're set up a really trusted and strong position to be trading partners with European and Japan and American automakers. So we're seeing really great traction there. There are complexities going into the Chinese market around data protection, around AI sovereignty. So while we're hopeful we can really look into markets like that in the future, today we're focused in Europe, Japan and North America.

22:57man who runs the geothermal power plant:No profits yet for the business. Do you expect, do you have a date in mind, a year in mind where you expect to be making money?

23:05Sean Farrington:That's the opportunity for us now. So we're early in our commercialization. But with this investment and the platform of partnerships that we have, we've now got the opportunity to see our AI deployed in commercial settings. So in robotaxi trials, starting this year in London and growing to 10 cities around the world, where we'll be launching supervised robotaxi trials. and then next year in consumer vehicles that you can buy with companies like Nissan.

23:27man who runs the geothermal power plant:Do you have a point in mind where we will all be getting into cars that are effectively driverless?

23:34Sean Farrington:I think every vehicle in the future is going to be autonomous. Now, whether that AI in the car is one that you give the ability to drive and give it the liability of driving and use that to free up your time for something else and provide a safer driving experience, or whether you want to drive and have the AI monitor and make sure that if you're distracted or inattentive, it can help catch any mistakes before they turn into risk or dangerous scenarios.

24:01man who runs the geothermal power plant:Is that within 10 years, within five?

24:03Sean Farrington:Well, we're going to see these trials and product deployed this year and next year. And then we're going to start to see the growth. And because we work with automakers to bring this technology into the vehicles they design, that gives us the opportunity to bring it into vehicles that have been produced at millions of unit volumes. So we're going to see, I think, rapid growth from these early deployments the next year into. And in the 2030s, if you're buying a car that isn't capable of driving autonomously, I think you're going to be really missing an opportunity. That's where the future is going to be.

24:31man who runs the geothermal power plant:So that's Alex Kendall, the co-founder and chief executive of the British Self-Driving Car Company. Well, certainly making the software behind a lot of it. Wave is the name of that business. Messages keep coming in. So thank you for them. It's clearly one area where we can maybe crystallise a little bit in our minds what the future potentially could look like and start to try and figure out, ask questions about what that means for all of us. Anthony in Liverpool had got in touch yesterday saying the arguments of the taxi company owner who we heard on yesterday, Sean, wake up tomorrow. He used to get on BBC Sounds and have a listen.

25:04man who runs the geothermal power plant:We had a big old discussion with him about that. He said the arguments of the taxi company owner are only the same as those of small businesses and employees up and down the country. AI has come to do what we do for less money and less people. And Rowan Crozier, who's our manufacturing boss on the show this morning. We've had a few more people getting in touch this morning as we continued the discussion, raising similar questions. You know, Peter, the taxi driver in Cambridgeshire, says, welcome to mass driver unemployment, amongst other things. Who else? Another saying, AI taxis, who is responsible for duty of care, not the same as safety?

25:43man who runs the geothermal power plant:Do you want to get into that in a minute? This one, Rowan, no one's asking the really big question, what are we all going to do? How are we going to earn a living once AI wipes out billions of jobs? Yeah, I mean, it's a question that I've sort of heard asked many, many times. And like I was alluding to earlier on, I don't think this is necessarily about job replacement because you're always going to need people to deal with people. And I think that's something that people shouldn't forget. I think there's going to be a shift in what people perhaps are doing and a focus on different areas where you've got that people-to-people interaction.

26:32man who runs the geothermal power plant:But, yeah, it is going to put pressure and it is going to raise questions in that area, of course dependent on on where it's adopted on what you know what walks of life that that are going to add the most benefit. Emma something else that came up in that interview with Alex Kendall there that we heard was his concerns about sharing information particularly potentially very lucrative innovative products that they have got with Chinese companies and Chinese car companies we're talking about there and that's he was sort of implying that they've been focusing a bit more on western car companies with the types they've been doing earlier does that surprise you or is that the way

27:16Sean Farrington:we're heading i think it speaks to a kind of um you know fear about technology and and you know intellectual property for example if you remember kind of the beginning of last year we saw um the massive US AI chip makers have their share prices really decimated by the emergence of DeepSeq, which was this kind of Chinese threat, which seemed to have been manufactured far more cheaply, far more quickly, and was a real disruptor. And we see this with other technologies as well, in the fact that Chinese autos seem to have been manufactured much more cheaply and more efficiently than, say, the likes of Tesla.

28:04Sean Farrington:I think it is the nature of our global economy and kind of global industry that there will always be challenges from other areas. But I think there's a difference between, you know, Chinese businesses piggybacking off Western innovation and managing to do it more efficiently, more cost productively, and ultimately helping to drive down the cost of some of these technologies for everyone in the world, which is a positive thing versus kind of what is your intellectual property and what should be protected. So there is a fine line, but I do think, you know, global industries ultimately make, you know, become more efficient and are positive for consumers.

28:45Sean Farrington:So yeah, you've got to be careful about the nuance there.

28:50man who runs the geothermal power plant:85058, do let us know your thoughts on this discussion. We'll go through a few more of those messages. We're going to hear from perhaps a different perspective, different angle on the car market with the boss of Volvo UK coming up on Way Cut to Money as well. Let me see a few more messages coming through, whether it's about potholes, drones, jobs, whatever it might be. Good joke from John as well. We'll get that in, John, don't you worry. 85058. It's 530.

29:20Sean Farrington:Got a business problem? There's a TED Talk for that. Stay updated on everything business on TED Business, a podcast hosted by Columbia Business School Professor Modupe Akinola. Every week she'll introduce you to leaders with unique insights on work, answering questions like, how do four-day work weeks work? Do will a machine ever take my job? Get some surprising answers on TED Business wherever you listen to podcasts.

29:47Three.

29:50man who runs the geothermal power plant:Wake Up To Money with Sean Farrington. Good morning it is Wake Up To Money. Thank you for being with us. Thank you for all of your messages so many different perspectives on the world of AI and on cars and driverless cars and how those worlds cross over at 25 to 6 this morning do keep those coming 85058 is the number to use as so many have done Trevor says what does the driverless car actually do when it encounters a large pothole does it swerve around it indicate wait until all is clear and says what happens when the robo taxi hits a pothole and blows a tyre can it repair itself you know potholes sort of encapsulating a little bit of some of those concerns around what might happen next um well done to john who's been in touch saying looking forward to the film about driverless cars finding waymo after all of those reports we've had to so many way from so many wake up to many listeners who have used the waymo google service in san francisco which we could well see on our roads here so yeah let me know your thoughts grendan in newix saying we should focus on flying cars and taxis and drones to take the pressure off the roads there is a lot going on here isn't there let's have a bit of a different look at the car industry now with the uk boss of volvo cars i've been speaking to nicole malillo shaw for the latest episode of the big boss interview podcast which you can get on bbc towns she told me amongst many things that she doesn't know how long it will take to repair more than 10 ,000 cars that are being recalled because of a fire risk.

31:25man who runs the geothermal power plant:So the company's asking people to return some of its EX30 SUVs after a small proportion caught fire. So we obviously spoke about that, the very latest situation there for those who may have those products, may be interested with what's going on there. There was much else to discover as well. I asked her how Volvo was navigating the ever-changing situation regarding US tariffs.

31:49UK boss of Volvo:The US is our second biggest market, China being first and UK being third. So we are a really big part of the global piece. On the US part, having the second biggest market in the turmoil of some of these tariffs is not ideal. And what our industry needs is stability. We've got the tariff situation going on. We've got hyper competition. But from an automotive perspective, if we have challenge in the US around tariffs, it means two things, really. One, the regionalisation piece. So we are setting ourselves up to build cars where we sell them. So that means building our EX90 in the US, where it's likely to be bigger volume.

32:25UK boss of Volvo:And then we have XE40, XE60 in Europe. And then we have XE70 in China. So get that regionalisation piece right, that will really help.

32:34man who runs the geothermal power plant:And have some of those moved over the years, where you may have built all of one car in China? Yes. But you've actually moved to Europe to try and avoid some of these tariff costs?

32:45UK boss of Volvo:And not necessarily from a tariff perspective, more from a proximity to where we sell. But yes, so EX30, for example, we manufacture in China. We've just, as of last summer, moved it to Ghent in Belgium to make sure that we've got a better setup to be able to get cars quicker to the customer. So exactly that.

33:02man who runs the geothermal power plant:The EX30 has, even in recent days, got a few headlines that you might not have wanted when you're setting out looking to sell a new car. And this has been to do with battery issues, with certain versions of that EX30, long range versions, some of the long range versions, where effectively you've said to customers, you need to be a bit careful about charging it in enclosed spaces. We advise you actually not to charge above 70 percent. And there's been some recalls this week. Can you just explain what has gone wrong there? Yes.

33:37UK boss of Volvo:And I think the first thing to say is that it's never good to have this kind of a spotlight. And I completely empathise with anyone who's experienced this. We have a proportion of our EX30 cars that have had risk of catching fire when they've been charged beyond 70%. So as a safety brand and safety being our top priority, we have advised customers not to charge beyond 70 % until we find a fix. So again, there's two points there. One is I appreciate it's quite scary to hear that message. And two is it's very inconvenient to charge to 70%. So we've been working really hard and quickly to get to a solution, which we now have.

34:18UK boss of Volvo:We've found the root cause. And I expect next week to be able to get those cars in and start to fix them.

34:25man who runs the geothermal power plant:So could you give a bit more information on the recall here in the UK?

34:29UK boss of Volvo:We are going to contact the customers who've had that issue to then look at how we fix the battery modules. I guess the important bit is that there's been a tiny percentage that have caught fire globally, 0.02%. So a tiny amount, but we still take it incredibly seriously. There's been no fatalities. And, you know, actually, when we talk about this situation, although it is far from ideal, and I fully recognise that, and as well as not being able to charge beyond 70 % while we get to this fix, there is significantly fewer electric cars that catch fire than petrol while people are deciding if they want to move to an electric car it's it's a headline grabber because of course it's a new thing and it's another reason to be cautious but in reality when you look at the data you know petrol is flammable there's there's much more concern around that area so we're on a journey as with every OEM or every manufacturer looking at batteries now as we move towards electrification and in this instance it's been unfortunate but we have found the root cause and we will be contacting people next week.

35:35man who runs the geothermal power plant:And so how many cars in the UK would that be? 10 ,000, 10 ,500. And what sort of time horizon would people expect that to be fixed within? You know if they're hearing this now they may well have already been aware that their model has been in the headlines even if it's not their specific car that is applicable. You know what should people expect as the here is a car that is in perfect condition back for you?

36:00UK boss of Volvo:So there's a couple of things. It depends on the amount of parts, which I'm just getting the information from, so how quickly we can resolve it. The important thing is we've found the root cause because it means we know what we need to do. And then we just need to get the parts in and start to fix that. We've given customers free charging as a result as well to make sure that they can have some recompense in the meantime. So I can't answer the question around how long. It depends on how quickly the parts come through, but I do know they're going to start coming through with the third week of March.

36:28man who runs the geothermal power plant:Growing up in Scunthorpe.

36:30UK boss of Volvo:You've done your research.

36:32man who runs the geothermal power plant:It wasn't the toughest amount of research but it jumped out at me reading around. Did you think you would end up running one of the biggest brands in the UK car industry? No, but I knew I wanted to work in the corporate world

36:51UK boss of Volvo:and I was always really inspired my mum will laugh at this, inspired by watching programs where it was kind of a female protagonist that kind of defied the odds and that's how I kind of saw it. I knew very humble beginnings, very proud of those humble beginnings but what that gave me is an aspiration to strive for more and that was at the core of everything just you know wanting to make sure that I was a bit more in control than maybe I'd seen and also I think when you get exposed to seeing how other people have made life choices, it feels very real that that could be you as well. So that's something that's definitely been a motivator for me.

37:30man who runs the geothermal power plant:What odds do you think you were defying?

37:34UK boss of Volvo:Well, I think if you look at Scunthorpe in particular, there's a high amount of unemployment. It's a very working class set up, which, by the way, I think has been fantastically grounding because, again, you understand what that looks like. And I believed I had to work exceptionally hard for everything that might come my way. And nothing was a given. And so although I'm well aware that people are fed back, that I come across quite relaxed, the amount of competitiveness and work ethic beneath that is quite significant. And that's been as a result of my family and as a result of what I've wanted to lean into.

38:16UK boss of Volvo:So I didn't know it was going to be automotive and it didn't start that way. But like, for example, starting my career in wound care in Smith & Nephew, I made a specific choice to move to London to move into FMCG, fast moving consumer goods on the basis I wanted to work on more high profile brands. So I suppose beneath that, there was a direction that I was moving towards.

38:39man who runs the geothermal power plant:we talk a lot a bit about a rising unemployment rate now and of course if you go to certain parts of the country that the unemployment rate will be considerably higher than the average for certain demographics it'll be higher for younger people we've talked about that a lot lately do you see now that you've you've been in so many aspects leading companies and brands in the world of business what is needed to improve the prospects for people who may be growing up in an area as

39:08UK boss of Volvo:you were in Scunthorpe back then yeah one word for me and that is hope because everything I see or I have seen where things may be spiral it's where they believe there's no other option um I have two little girls and one of the things I am really conscious of despite you know being in a busy job, my husband's in a busy job, is making sure that they don't feel their centre of their universe is their friends. Because whilst it's important, being able to have the conversations with parents is so significant. Because when they get to teenagers, if you haven't created that outlet, then there's a nervousness that they turn to who is giving them the attention.

39:49UK boss of Volvo:And that might not be the right way. So I think, look, life is tough. And if you see it in certain areas where it's high unemployment, then you might perceive there's no way out. So I think having that hope that things can get better, which comes with accessibility to a better life, jobs, belief that you can do better, all those things. But I think it starts at such a young age, where I think about growing up at school, where you could really see the children that were heading in one direction and you could also see that their parents were heading in one direction so being able to navigate between the two was really important.

40:32man who runs the geothermal power plant:Nicole Malillo-Shaw from Scunthorpe to here in the studio in Salford and the journey in between thank you very much for your time today. Thank you. That was the boss of Volvo UK Dave's been in touch saying petrol is tried and tested electric cars are a no-no for me plenty thinking all different things about the car industry but there's lots going on elsewhere as well we had Aston Martin yesterday saying it's going to let go some of its 500 some 500 of its workers as it seeks savings to offset widening losses at the luxury car maker based in Warwickshire of course um Rowan when you saw this one you know not too far down the road from you may well have you know overlapping supply chains at some overlapping contacts has this come as a surprise uh in terms of job losses at aston martin it doesn't affect us uh fortunately but i know a lot of manufacturers in my network will be concerned by that announcement um i i think overall we're seeing a huge amount of of change as a result of what's going on in the world in terms of what the consumer is willing to buy or consider buying, whether that's new legislation, slippage to net zero targets, cost of living crisis, supply chain issues, all of that is destabilizing the demand for new technology, including EVs.

42:03man who runs the geothermal power plant:When Aston Martin used the tariffs, the American tariffs, they call them extremely disruptive, and they've seen extremely subdued demand from China. Is that something you are seeing right across the industry? Absolutely. I think if you're fortunate enough to have something that's, you know, very sparsely available, and if I come back to my company, Brandauer, you know, we're doing high precision components and there isn't a plethora of people that are doing that. So we haven't actually, we've actually seen growth in the US, for example, over the last six months with new business. And that's as a direct result of us doing something that can't be done locally.

42:47man who runs the geothermal power plant:So our customers are continuing to work strongly with us. The more damaging thing, which has been alluded to around tariffs, is the uncertainty and the variation in demand that tariffs create. So people are ordering late, making decisions on new product development late, and then where they're placing that business is a further sort of complication of decision making. All of that manifests itself with us getting quite an unsmooth take up to decision making, which means things take longer or decisions are made later. And all of that doesn't help with planning. It's Rowan Crozier who's with us this morning, Chief Executive of Brand Hour, the manufacturer in Birmingham.

43:33man who runs the geothermal power plant:Emma Wall also with us, Chief Investment Strategist at Hargreaves Lansdowne. Emma, notable that John Lewis, the retailer, is actually winding down its housing business, its housing venture that back in 2020, Baroness White, when she was running the company then, decided to move it into Build for Rent. But now that's all gone. and they just want nothing to do with it, it seems.

43:58Sean Farrington:Yeah, so they're pulling out the 500 million deal, which was designed to build 1 ,000 homes, specifically for rent, so in Bromley, Reading and West Ealing. I mean, they say they are committed to their existing projects, but you're right, I think it causes a question over actually its commitment in this sector. A couple of things are at play here. Number one, 2020 was really the worst possible time to be entering into buy to rent markets. So if you think about the pandemic, which really changed people's priorities of what they wanted, you know, the attractiveness of flats really, you know, went down because people were working in a more hybrid way, working from home, valuing outdoor space.

44:45Sean Farrington:And then we had the tragic invasion of Russia in Ukraine, which obviously caused huge loss of life and geopolitical issues, but also disrupted trade routes, which meant the cost of building things like these sort of big flat complexes just went through the roof. So in terms of timing, 2020 couldn't have really got much worse. Add on to that, had inflation spikes, so interest rates went up, which meant mortgages were more expensive. so I think really they're sort of dipping their toe into a new industry has been beset by a lot of headwinds and so therefore it's not that surprising that they're choosing to kind of wind back it will be interesting to see after they've fulfilled their existing commitments with partnership firms whether they remove themselves entirely from the industry

45:32man who runs the geothermal power plant:So that is what is going on at John Lewis at the moment Maybe we'll start to see changes on that shop floor, on the online offering that they have in the coming years as well, the way we've seen with some other big department stores and how they've had to change in recent times. Just a few other things I wanted to mention this morning. So Diageo, which is one of Britain's biggest businesses, has the Guinness and Johnny Walker labels it makes, as well as many others as well. the new boss there former tesco boss sir dave lewis drastic dave he got his nickname for there and it has been used again here so uh diageo's cut its sales forecast uh it's has it stopped the dividends um emma is that also what it's done for now is it look is he looking to use money elsewhere

46:22Sean Farrington:yeah he slashed the dividend yeah i mean i think this is quite a clever tactic from a new ceo you You know, you set expectations very low and you can only surprise the upside. But it does come as sort of a couple of weeks after Heineken's results as well, which reveal that people just are drinking less. You know, there is this sort of an industry challenge for these alcohol manufacturers with changing trends. I went to a Diageo Investor Relations presentation a couple of years ago. And at the time, the person who was talking talked about how Diageo had survived the prohibition era and so therefore would be able to survive Gen Z.

47:03Sean Farrington:But I think the difference between those two is the prohibition era was forced upon people. Gen Z is choosing not to drink so much alcohol and is a lifestyle and health choice. So it will be interesting to see not just how Diageo, but how all of these alcoholic drinks manufacturers evolve their product offering to make themselves appealing to the next generation.

47:24man who runs the geothermal power plant:A battle for Diageo. Molson Coors as well has said it plans to close Sharpe's Brewery by the end of the year. The Cornish Brewery, behind the popular beer brand Doombar as well, I know. So people will be wondering what the future of that will be. Might be wondering what the future of Sheffield Wednesday might be this morning as well. The consortium named as the preferred bidder to buy it has pulled out of a takeover of the Championship Club. We heard from those administrators a few months ago, didn't we, on Wake Up To Money about their plans there. So wonder what happens next. Let's talk geothermal power now.

47:56man who runs the geothermal power plant:Dr Ryan Law is Chief Executive of Geothermal Engineering Limited and it runs the first geothermal power plant that is being switched on here in the UK in Cornwall today as well. So a bit of mixed news for Cornwall this morning. And this technology, which harnesses heat energy stored beneath the Earth's surface, will provide electricity for 10 ,000 homes a year. A few other sites as well. Dr. Law, very good morning to you. Good morning, Sean. What is going to happen today? How is this new plan exactly working?

48:27Sean Farrington:So it's a relatively simple concept. It's just taken a bit of a while to get to this point. We have drilled down to five kilometres under the ground in Cornwall. where the water is very hot. So it's close to sort of 200 degrees C. And we use that heat, that hot water, to effectively spin a turbine at the surface. So that turbine spins 24-7. So we can produce renewable electricity all the time, no matter what the weather does, no matter what geopolitical events are doing.

49:05man who runs the geothermal power plant:Andy and Darby's been in touch, and he's asked a few questions that would be applicable to many different parts of the energy sector because he would like to know, what's the output in megawatts? What's the strike rate? So how much are we paying for each megawatt per hour? What's the cost to build the expected life of the plant? Are there some of those you could give us a rundown on?

49:26Sean Farrington:Yeah, yeah. I mean, this one obviously, it's the first. So when anyone does the first, it tends to cost more than the subsequent projects. So this one was about a 50 million project. and that includes both the power and the lithium production, which we may also talk about. It is supported under the strike price regime and that strike price, I think, because we're a baseload power is actually pretty low. So we are down at 119 on a strike price and we did get the first strike price for any geothermal power in the UK.

50:04man who runs the geothermal power plant:So Andy I'll let you go away and use that number and let us know what maybe you think about it Another message we had here Ryan along the lines of when you talk about this being the first one What next? Somebody said the Midlands have hundreds of abandoned coal pits and thousands of smaller ones The deeper ones would surely be suitable for geothermal energy access and supply Even the flooded ones is that something that could be tapped into?

50:29Sean Farrington:I think it's just making a distinction between geothermal heat. So a lot of those old mines across the country could be used just for geothermal heat. But for power, we do need to go to temperatures above 100 degrees C. So you tend to need to go deeper underground than most of those mines in the UK.

50:52man who runs the geothermal power plant:And just this idea of what do we really need this energy for? do you feel like your priority in doing this is for the equivalent of 10 000 homes a year or is it actually really needed because of all the data centers we might well be looking to build around the country at a certain point what what is really from your perspective creating the demand for this

51:17Sean Farrington:kind of energy yeah i mean i i do think that's that's a good question i think um i think over sort of the last 10 years, the sort of use of electricity has been relatively flat. And it's only very recently that there is an increase in demand for electricity, not just in the UK, but across the US and across Europe. And that is being driven by electrification, electrification of cars, electrification of heating, and also potentially this much larger use for data centers. So it's just a demand side is creating more need for this sort of power, i.e. power that runs all the time.

51:57man who runs the geothermal power plant:Well, a big day. Good luck, Ryan. I guess there's no luck involved in this kind of stuff. You make your own look when you're opening up geothermal power plants, but I hope it all goes well. Is there a time it switched on? Has it already gone on?

52:12Sean Farrington:it's head it's we will we will actually export to the grid at about half past 10 this morning

52:17man who runs the geothermal power plant:okay i like the idea of there just being one sort of button or a light switch in the corner that somebody flicks on but i'm sure it's much more complicated than that dr ryan law chief executive officer of geothermal engineering limited ruined that plan big thanks to rowan to emma to everybody who's been in touch so many messages so many stories as well somebody saying what a mix well thanks to the wake up to any team for putting it together for us to talk about that's it from us today wake up to money from bbc 5 live that's it from wake up to money you can download the podcast every monday to friday so please make sure you subscribe we'd also love it if you left us a review when you do get in touch keep the conversation going anytime as well on social media use the hashtag wake up to money

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1:31:43man who runs the geothermal power plant:That was the boss of Volvo UK. Dave's been in touch saying petrol is tried and tested. Electric cars are a no-no for me. Plenty thinking all different things about the car industry, but there's lots going on elsewhere as well. We had Aston Martin yesterday saying it's going to let go some 500 of its workers as it seeks savings to offset widening losses at the luxury carmaker based in Warwickshire, of course. Rowan, when you saw this one, you know, not too far down the road from you, may well have overlapping supply chains at some point, overlapping contacts. Has this come as a surprise? In terms of job losses at Aston Martin, it doesn't affect us, fortunately, but I know a lot of manufacturers in my network will be concerned by that announcement.

1:32:36man who runs the geothermal power plant:I think overall we're seeing a huge amount of change as a result of what's going on in the world in terms of what the consumer is willing to buy or consider buying whether that's new legislation, slippage to net zero targets, cost of living crisis, supply chain issues all of that is destabilising the demand for new technology including EV And when Aston Martin use, you know, the tariffs, the American tariffs, they call them extremely disruptive and they've seen extremely subdued demand from China. Is that something you are seeing right across the industry? okay absolutely um i think i think if you're fortunate enough to have something that's you know very sparsely available and if i come back to my company brand hour you know we're doing high precision components and there isn't a plethora of people that are doing that um so we haven't actually we've actually seen growth in the us for example over the last six months with new business.

1:33:45man who runs the geothermal power plant:And that's as a direct result of us doing something that can't be done locally. So our customers are continuing to work strongly with us. The more damaging thing, which has been alluded to around tariffs, is the uncertainty and the variation in demand that tariffs create. So people are ordering late, making decisions on new product development late. And then where they're placing that business is a further sort of complication of decision making. All of that manifests itself with us getting quite an unsmooth take up to decision making, which means things take longer or decisions are made later.

1:34:28man who runs the geothermal power plant:And all of that doesn't help with planning. It's Rowan Crozier, who's with us this morning, Chief Executive of Brand Hour, the manufacturer in Birmingham. Emma Wall also with us, Chief Investment Strategist at Hargreaves Lansdowne. And Emma, notable that John Lewis, the retailer, is actually winding down its housing business, its housing venture that back in 2020, Baroness White, when she was running the company then, decided to move it into build for rent. But now that's all gone. They just want nothing to do with it, it seems.

1:35:01Sean Farrington:Yes, they're pulling out the 500 million deal, which was designed to build 1 ,000 homes, specifically for rent. So in Bromley, Reading and West Ealing. I mean, they say they are committed to their existing projects, but you're right. I think it causes a question over actually its commitment in this sector. A couple of things are at play here. Number one, 2020 was really the worst possible time to be entering into buy to rent markets. So if you think about the pandemic, which really changed people's priorities of what they wanted, you know, the attractiveness of flats really, you know, went down because people were working in a more hybrid way, working from home, valuing outdoor space.

1:35:47And then we had the tragic invasion of Russia in Ukraine,

1:35:52Sean Farrington:which obviously caused huge loss of life and geopolitical issues, but also disrupted trade routes, which meant the cost of building things like these sort of big flat complexes just went through the roof. So in terms of timing, 2020 couldn't have really got much worse. Add on to that, had inflation spikes, so interest rates went up, which meant mortgages were more expensive. So I think really they're sort of dipping their toe into a new industry has been beset by a lot of headwinds. And so therefore, it's not that surprising that they're choosing to kind of wind back. It will be interesting to see after they fulfilled their existing commitments with partnership firms, whether they remove themselves entirely from the industry.

1:36:35man who runs the geothermal power plant:So that is what is going on at John Lewis at the moment. Maybe we'll start to see changes on that shop floor, on the online offering that they have in the coming years as well, the way we've seen with some other big department stores and how they've had to change in recent times. Just a few other things I wanted to mention this morning. So Diageo, which is one of Britain's biggest businesses, has the Guinness and Johnny Walker labels it makes, as well as many others as well. the new boss there, former Tesco boss, Sir Dave Lewis, Drastic Dave, he got his nickname for there and it has been used again here.

1:37:13man who runs the geothermal power plant:So Diageo has cut its sales forecast. Has it stopped the dividends, Emma? Is that also what it's done for now? Is he looking to use money elsewhere?

1:37:24Sean Farrington:Yeah, he slashed the dividend. Yeah. I mean, I think this is quite a clever tactic from a new CEO. You know, you set expectations very low and you can only surprise the upside. But it does come as sort of a couple of weeks after Heineken's results as well, which reveal that people just are drinking less. You know, there is this sort of an industry challenge for these alcohol manufacturers with changing trends. I went to a Diageo Investor Relations presentation a couple of years ago. And at the time, the person who was talking talked about how Diageo had survived the Prohibition era and so therefore would be able to survive Gen Z.

1:38:06Sean Farrington:But I think the difference between those two is the Prohibition era was forced upon people. Gen Z is choosing not to drink so much alcohol and is a sort of is a lifestyle and health choice. So it'll be interesting to see not just how Diageo, but how all of these alcoholic drinks manufacturers evolve their product offering to make themselves appealing to the next generation.

1:38:27man who runs the geothermal power plant:A battle for Diageo. Molson Coors as well has said it plans to close Sharpe's Brewery by the end of the year. The Cornish Brewery, behind the popular beer brand Doombar as well, I know. So, you know, people will be wondering what the future of that will be. Might be wondering what the future of Sheffield Wednesday might be this morning as well. The consortium named as the preferred bidder to buy it has pulled out of a takeover of the Championship Club. We heard from those administrators a few months ago, didn't we, on Wake Up To Money about their plans there. So wonder what happens next. Let's talk geothermal power now.

1:38:59man who runs the geothermal power plant:Dr Ryan Law is Chief Executive of Geothermal Engineering Limited and it runs the first geothermal power plant that is being switched on here in the UK in Cornwall today as well. So a bit of mixed news for Cornwall this morning. And this technology, which harnesses heat energy stored beneath the Earth's surface, will provide electricity for 10 ,000 homes a year. A few other sites as well. Dr Law, very good morning to you. Good morning, Sean. What is going to happen today? How is this new plan exactly working?

1:39:30Sean Farrington:So it's a relatively simple concept. It's just taken a bit of a while to get to this point. We have drilled down to five kilometres under the ground in Cornwall. where the water is very hot. So it's close to sort of 200 degrees C. And we use that heat, that hot water, to effectively spin a turbine at the surface. So that turbine spins 24-7. We can produce renewable electricity all the time, no matter what the weather does, no matter what geopolitical events are doing.

1:40:08man who runs the geothermal power plant:Andy and Darby's been in touch and he's asked a few questions that would be applicable to many different parts of the energy sector. Because he would like to know, you know, what's the output in megawatts? What's the strike rate? So how much are we paying for each megawatt per hour? What's the cost to build the expected life of the plant? Are there some of those you could give us a rundown on?

1:40:28Sean Farrington:Yeah, yeah. I mean, this one, obviously, you know, it's the first. So when anyone does the first, it tends to cost more than the subsequent projects. So this one was about a 50 million project. And that includes both the power and the lithium production, which we may also talk about. It is supported under the strike price regime. and that strike price, I think because we're a baseload power is actually pretty low. So we are down at 119 on a strike price. And we did get the first strike price for any geothermal power in the UK.

1:41:07man who runs the geothermal power plant:So Andy, I'll let you go away and use that number and let us know what maybe you think about it. Another message we had here, Ryan, along the lines of when you talk about this being the first one, what next? Somebody said the Midlands have hundreds of abandoned coal pits and thousands of smaller ones. The deeper ones would surely be suitable for geothermal energy access and supply, even the flooded ones. Is that something that could be tapped into?

1:41:33Sean Farrington:I think it's just making a distinction between geothermal heat. So a lot of those old mines across the country could be used just for geothermal heat. But for power, we do need to go to temperatures above 100 degrees C. So you tend to need to go deeper underground than most of those mines in the UK.

1:41:55man who runs the geothermal power plant:And just this idea of what do we really need this energy for? Do you feel like your priority in doing this is for the equivalent of 10 ,000 homes a year? Or is it actually really needed because of all the data centres we might well be looking to build around the country at a certain point? What is really, from your perspective, creating the demand for this kind of energy?

1:42:20Sean Farrington:Yeah, I mean, I do think that's a good question. I think over sort of the last 10 years, the sort of use of electricity has been relatively flat. And it's only very recently that there is an increase in demand for electricity, not just in the UK, but across the US and across Europe. And that is being driven by electrification, electrification of cars, electrification of heating, and also potentially this much larger use for data centers. So it's just a demand side is creating more need for this sort of power, i.e. power that runs all the time.

1:42:59man who runs the geothermal power plant:well a big day good luck ryan i guess there's no luck involved in this kind of stuff you make your own look when you're opening up geothermal power plants but uh yeah hope it all goes well when uh is there a time it switched on has it already gone on it's head it's we will we will actually

1:43:16Sean Farrington:export to the grid at about half past 10 this morning okay i like the idea of there just being

1:43:21man who runs the geothermal power plant:one sort of button or a light switch in the corner that somebody flicks on but i'm sure it's much more complicated than that. Dr Ryan Law, Chief Executive Officer of Geothermal Engineering Limited, ruined that plan. Big thanks to Rowan, to Emma, to everybody who's been in touch. So many messages, so many stories as well. Somebody saying, what a mix. Well, thanks to the Wake Up To Any team for putting it together for us to talk about. That's it from us today. Rachel and Rick up next on Breakfast. Good morning to you guys.

1:43:56Thank you.

1:44:26Sean Farrington:Every week she'll introduce you to leaders with unique insights on work, answering questions like, how do four-day work weeks work? Do will a machine ever take my job? Get some surprising answers on TED Business wherever you listen to podcasts.